As health care costs go up, the importance of the supermarket pharmacist's role in consumers' lives is also rising.
Medical advice is one of the most expensive and time-consuming commodities in the country. Yet supermarkets provide consumers with some relief through pharmacy — a store category designed for convenience, and a source of health and wellness counsel, sources told SN.
Premiums for employer-sponsored health insurance in the United States have been rising four times faster on average than workers' earnings since 2000, according to “Employee Health Benefits: 2006 Annual Survey” from the Kaiser Family Foundation, Menlo Park, Calif.
It is becoming both advantageous and imperative for supermarkets hoping to win customer loyalty to provide contact with knowledgeable pharmacists and pharmacy staff members, retailers told SN.
“Customer loyalty to pharmacists is almost equal to that of physicians,” said Jim Merulla, store director of a Hy-Vee Drugstore in Marshalltown, Iowa. Hy-Vee is based in West Des Moines, Iowa. Besides its 200 supermarkets, Hy-Vee operates more than 25 drug stores.
“The pharmacists are simply the most trusted individuals in our stores,” added Alan Smith, pharmacy category manager, Bi-Lo, Mauldin, S.C.
Part of the reason for such strong loyalty is the convenience factor, said consultant Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill. “The pharmacist is the only readily accessible health care professional that the customer can go to without going through everything involved in seeing a doctor and dealing with insurance companies.”
Supermarkets, Wisner said, have a greater opportunity to make the pharmacy an integral part of the entire store than do other classes of trade, because “it's not just medication and over-the-counter products, it's diet and all the tools you use in everyday life.”
Merulla posed the question, “If one doctor spent two minutes with you and sent you out the door, and another took 15 minutes to learn a little about your medical history and your current symptoms, which would you go back to?”
The same logic can be applied to retail pharmacy, with almost all loyalty being based on how customers are treated by employees, he said. “If I moved our pharmacist across town, our customers would still go to him.”
A conflict does exist, however, between the operational requirements of pharmacists and the customer-service aspect, said Bill Bishop, president of Willard Bishop, Barrington, Ill. “These are all highly paid personnel, and the businesses that hire them want to get measurable productivity.”
Yet, although it is harder to measure, “we know the presence of the pharmacist to the customer will generate sales and loyalty,” he said.
At Publix Super Markets, Lakeland, Fla., the entire pharmacy staff is trained on customer service, along with the rest of the store's employees, spokeswoman Maria Brous told SN. “When we get our pharmacists, we immerse them in our culture.”
This includes ongoing customer-service training meetings, where pharmacy employees interact with personnel from the rest of the store and vice versa. “Our pharmacy staffers ask customers questions about health and family history, and build relationships with our customers,” Brous said. “It is different than larger chains, because we have the ability to take that time for our patients and really understand their family needs.”
The effects of Publix's approach were reflected in the results of a customer-satisfaction study at retail pharmacy released late last month by J.D. Power and Associates.
The inaugural national Retail Pharmacy Satisfaction Study polled 6,543 consumers who filled a new prescription or refilled a prescription in the three months prior to the survey. Based on a 1,000-point scale, Publix ranked highest in the supermarket segment, with a score of 851 points, receiving high ratings in convenience, pharmacy staff, medication availability and information, and store layout and design. Wegmans Food Markets, Rochester, N.Y., followed with 838 points, and Safeway, Pleasanton, Calif., ranked third with 827 points.
Medicine Shoppe, Earth City, Mo., led the drug store chain segment with 866 points and received the highest ratings in all aspects driving customer satisfaction. However, chain drug giants CVS/pharmacy, Woonsocket, R.I., and Walgreens, Deerfield, Ill., significantly trailed the leading pharmacy retailers, tied at 786 points.
Across the study, the ratings indicate higher levels of customer service for supermarkets, on average, vs. chain drug stores. One of the drivers behind this may be how well the general staff can help customers who have pharmacy questions, said David Stefan, executive director of the health care practice at J.D. Power and Associates, Westlake Village, Calif.
“As compared to other brick-and-mortar channels, we found that the supermarket non-pharmacist staff scored consistently a bit higher on their knowledge, courtesy and availability to assist customers,” he said. Supermarkets can build on the base they have created to “help customers feel cared-for and welcome as they are entering the store, and bring that through to the pharmacy.”
In turn, pharmacist-generated sales come from prescription medications and over-the-counter products, retailers said.
“In the food channel, and with our stores in particular, our pharmacists are provided with OTC-switch and new-product information, and are accessible by every customer seeking interaction, dosing and educational advice,” Smith said.
Engaging the customer at the pharmacy is a core business focus for Bi-Lo, he said. “Ultimately, it leads to increased basket size and greater profitability.”
Jim Linden, director of pharmacy for Nash Finch Co., Minneapolis, added, “We believe — and history shows — that the pharmacist is most trusted, and in our stores they play a very important role in advising customers.”
The involvement of a pharmacist with customers can attract traffic and extend the one-stop-shop strategy, Stefan said.
“To the extent that people view a supermarket as a component of health care delivery, including off-the-shelf needs, it will be an emerging trend for the supermarket to find an increased competition level when providing more integrated services related to health,” he said.
As a health care delivery channel, supermarkets are at an advantage over other retail outlets, however. “Within the four walls, you have more opportunities to connect with your customer in terms of how they manage their own personal health and well-being than you do in any other kind of retail format,” said Wisner.
The pharmacist is the core of a supermarket's health care offering, retailers and consultants told SN. “It is well within the pharmacist's role as a health care provider to become a knowledgeable source of information for customers,” Wisner added.
A trade survey release by Information Resources Inc., Chicago, last month noted that 87% of retail pharmacy executives surveyed reported that their pharmacy business is growing faster than the total store.
In addition, over two-thirds of respondents do not think they are effectively converting the pharmacy traffic into increased sales in other areas of the store, including food and beverage. Findings presented in the survey, “IRI Healthcare Report: Leveraging Healthcare as a New Platform for Total Store Growth,” are based on an analysis of retailer and consumer information from two of the company's targeted consumer panels, as well as its InfoScan retail sales tracking service.
“We try to pull data from one-third each of food, drug and mass-merchandise retailers,” Bob Doyle, senior vice president, IRI healthcare solutions group, told SN.
“Using health care as a marketing tool can help retailers drive business,” he said.
JOIN THE CLUB
One example of this strategy is the Live Better! Wellness Club, started in January by A&P, Montvale, N.J.
The club, available in all banners that already offer a club card, charges an enrollment fee of $9.99 that immediately earns the customer $9.99 off their next purchase of $50 in groceries.
Members without prescription drug insurance can pay $9.99 for up to a 90-day supply of more than 300 generic drugs at A&P. Information and discounts on prescription drug alternatives, vitamins and other OTC items, as well as foods that promote healthful eating, are provided, along with recipes.
The program also offers a 10% prescription discount to senior citizens, children from newborn to 5 years old, and pets.
At the center of this broad-reaching program is the pharmacy. “Sign-ups take place only at the pharmacy department, but program discounts extend throughout the store,” said Carol DiNicolantonio, senior director of pharmacy for A&P.
The program's aim is to educate A&P customers about the many products representing healthful alternatives, not just in the pharmacy, but elsewhere in stores too, and to make them available at great values, she said.
“What we eat is directly tied to overall well-being, and we want to play a role in helping our shoppers make good decisions for themselves and their families by educating them about nutrition, providing healthy recipes, teaching them to read and understand product labels, and generally make smart purchases. We also recognize that, short-term, it may appear more cost-effective to cut corners on nutrition. So if we can save customers money while they make better choices, it's a definite win-win situation.”
To accomplish this, every pharmacist and pharmacy team member is specifically trained to help administer the program, she said. “That's a critical aspect. Customer information and assistance is a vital element of the program benefits.”
One of the ways Publix practices not only familiarizing their pharmacy staff with other aspects of the store, but also familiarizing general store staff with the pharmacy, is to encourage non-pharmacist associates working in the pharmacy to become technicians. “Once they receive that training they become more knowledgeable,” Brous said.
Although pharmacy technicians and other employees can take some of the burden of filling prescriptions and talking to customers off the pharmacist's shoulders, it may not always be enough.
At Hy-Vee, “several” pharmacies have pill-counting robots, according to Merulla. His Marshalltown store was the most recent to install one, in March, he said.
The robot is the SP 200 from ScriptPro, Mission, Kan. The machine interfaces with the pharmacy's computer system to fill, label and deliver prescriptions to the pharmacists or technicians for verification. It also holds the top 200 drugs purchased by pharmacy customers in stock, he said.
The reasons for getting a robot are twofold, Merulla said. “Most importantly, it frees up our employees to aid the customers. The other side of that is, it's quicker and takes care of our customers faster.”
Merulla said anything a store can do to make the visit convenient adds to customer loyalty. Meanwhile, his pharmacist has time to help customers, even with small healthy reminders like telling them, “after a few days on an antibiotic, you're susceptible to reinfecting yourself unless you replace your toothbrush.”
Additional reporting: Dan Alaimo
IRI Report: Building a Platform on Health
CHICAGO — Four out of 10 shoppers surveyed by Information Resources Inc. here said they fill their prescriptions and then leave the store.
Called “IRI Healthcare Report: Leveraging Healthcare as a New Platform for Total Store Growth,” the survey, released last month, was based on an analysis of consumer information from two of the company's targeted consumer panels, as well as its InfoScan retail sales tracking service.
“During the next decade, increased pharmacy traffic represents a major incremental sales opportunity for retailers that are able to effectively link this department to the rest of the store,” the study said.
One way to do this is by appealing to Medicare Part D beneficiaries, said Bob Doyle, senior vice president at IRI. By offering those customers discounts on generic drugs or assistance in signing up for the benefit, retailers can significantly increase business. “Those folks are in the store almost twice as often as other customers, making the market basket that much larger,” he said.
According to the report, retailers can build their own health care platform by taking action on the following:
Establish the pharmacy and store as the shoppers' expert source for ailment-specific health products and information.
Link the pharmacy to other areas of the store in ways that increase basket size and shopper trips.
Create a health-driven point of differentiation vs. competing stores and channels.
Develop a new health-based platform to revitalize Center Store and grow profitable sales.
2007 Retail Pharmacy Satisfaction Study
|Company||Overall Experience||Convenience||Non-Pharmacist Staff||Medication Availability and Info||Store Layout and Design||Competitiveness of Pricing||Pharmacist|
|Scoring: 5, Among the Best; 4, Better Than Most; 3, About Average; 2, The Rest. *Jewel-Osco, an Albertsons banner, is owned by Supervalu. |
Source: J.D. Power Reports: 2007 Retail Pharmacy Customer Satisfaction Study. J.D. Power and Associates' ratings are based on responses from 6,543 consumers who filled a prescription in the three months prior to the survey. The survey was conducted in October and November 2006 and released last month. Consumers were surveyed based on the store banner, not corporate ownership, of each chain.
LIVONIA, Mich. — Consumers' need for convenience is leading to a growing acceptance of in-store health care clinics, according to a study released last month by Market Strategies, a research firm based here.
The findings suggest that a consumer-driven transformation of health care is under way, with 30% of consumers polled saying that retail clinics should compete with primary care physicians by offering a broader variety of more complex care and diagnostic services.
In addition, 12% of retail clinic patients with a primary care physician agreed with the statement, “Retail clinics have mostly or completely replaced my primary care physician for the type of treatments offered at retail clinics.”
The study surveyed 600 retail clinic users and 900 potential users.
“Our study specifically asked retail clinic patients how important various factors were in their decision to utilize a retail clinic,” said John Thomas, vice president, health care delivery systems group, Market Strategies. The top two reasons were, “Could walk in without scheduling an appointment,” and, “Could obtain care outside of normal physician office hours,” he said.
Publix Super Markets, Lakeland, Fla., which partners with The Little Clinic, Louisville, Ky., currently has 14 of The Little Clinics in Publix store locations, Maria Brous, Publix spokeswoman, told SN.
“In-store clinics offer a convenient service to our customers, which will help us differentiate from our competitors and build loyalty,” she said.
For supermarkets hoping for more differentiation, “they can look at ways to integrate the clinic further within the store, such as making over-the-counter medications visible to clinic patients and encouraging employees to use the clinic to build a critical mass of acceptance,” said Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill.
Bi-Lo, Greenville, S.C., currently has nine clinics run by WellSpot, Birmingham, Ala., with six more planned for 2007 and another 15 to 20 for 2008, Alan Smith, pharmacy category manager for Bi-Lo, told SN.
However, around each of the clinics, Bi-Lo is considering the creation of a Wellness Center with “kiosk technology to provide recipes, drug interaction information and coupons for healthy living items,” Smith said.
In addition, Smith is considering adding “weight-control-certified pharmacists, and the convenience and ease of using the clinic to create a place where families can feel good about purchasing their meal plans, and obtaining quality basic health care treatment and advice.”
These additional elements could serve to distinguish the store even further. “In the future, retailers with clinics will have to differentiate their health and wellness offering by the type of store and the type of clientele, just like they do with any other offering,” said Bill Bishop, president, Willard Bishop, Barrington, Ill.
Some of the “fill-in” health solutions like in-store clinics may “skew downmarket, because they will be more relevant in communities where medical accessibility is a really big issue,” he said.